1. ABSTRACT:
Education in
every sense is one of the fundamental factors of development. No country can
achieve sustainable economic development without substantial investment in
human capital. It enriches people’s understanding of themselves and world. It
improves the quality of their lives and leads to broad social benefits to
individuals and society. Education raises people’s productivity and creativity
and promotes entrepreneurship and technological advances. In addition it plays
a very crucial role in securing economic and social progress and improving
income distribution. This paper reviews the role of education in promoting
economic well-being, with a particular focus on Indian economy.
2. INTRODUCTION:
Skills and knowledge are the driving force of
economic and social development for any country. Education sector plays a vital
role in overall economic development of a nation. A nation's educational
infrastructure offers a concrete system comprising of Primary education,
Secondary education and Higher education.
Education provides a foundation for development,
the groundwork on which much of our economic and social well-being is built. It
is the key to increasing economic efficiency and social consistency. By
increasing the value and efficiency of their labor, it helps to raise the poor
from poverty. It increases the overall productivity and intellectual
flexibility of the labor force. It helps to ensure that a country is
competitive in world markets now characterized by changing technologies and
production methods. By increasing a child’s integration with dissimilar social
or ethnic groups early in life, education contributes significantly to nation
building and interpersonal tolerance.
The massive expansion of education in India has a
significant contribution to economic development. The constitution of India has
made education a fundamental right provisioning free and compulsory education
for children age group of 6 to 14. Providing education by government and
various private sector institutions to the masses in the country playing a
crucial role in increasing the quality and the productivity of the labors and
thereby increasing individual earnings. It further helps in reducing poverty
and thereby enhancing nation’s economic development.
6. Four alternative growth scenarios: putting
education in the picture-
Education is an important
factor in economic growth and development. Based on new education attainment
data, researchers from IIASA suggest four scenarios to illustrate the impact of
four alternative educational level distributions on annual GDP growth rates
(Figure 1). These four scenarios roughly resemble alternative hypothetical education
policy strategies for an developing country.
Scenario 1, presents the reference case of a country with a young age structure (70%
of the working age population in the 15- to 40-year-old group and 30% in the
40- to 65-year-old group), a low starting level of income and investment rate
and the following educational structure: half of the population with no formal
schooling, 40% with some primary, and 10% with at least completed junior
secondary school (but no tertiary education). The education groups used in the
analysis (no education, primary, secondary, and tertiary) are non-overlapping.
This roughly fits the demographic structure of some Latin American and African
countries in the IIASA study sample, e.g., Guatemala, Honduras, Kenya, Rwanda
or Uganda. On the basis of the estimated model, such a country would have
rather slow economic growth.
Scenario 2, considers an otherwise identical country under the hypothetical
assumptions that it has a long time ago met the Millennium Development Goal
(MDG Goal 2) –‘achieve universal primary education’ – and that the previously
uneducated half of the adult population now has primary education. This case
would lead to somewhat higher average growth of GDP.
Scenario 3, considers a possible new MDG effort that adds widespread secondary
education (assuming 50% of the population achieves at least some secondary
schooling) to universal primary. The model simulations indicate that this
additional investment in secondary education provides a huge boost to economic
growth, over five times the level of the baseline scenario and also much more
than in the scenario of universal primary education alone.
Scenario 4, which somewhat resembles the case of India, presents another possible direction
of improvement from the baseline. In this scenario half of the population
remains without education even though 5% have tertiary, 15% secondary, and 30%
have primary education. This case of elitist education, in a country with half
of the population without any schooling, clearly does better than the baseline
and even better than the universal primary education combined with 10%
secondary and no tertiary. However, falls far short of the economic growth
implied by universal primary combined with 50% secondary and no tertiary
education.
The two key conclusions to be drawn from these scenarios are:
1. Education matters
in economic growth .The scenarios show that investment in education pays off in
terms of higher long-term economic growth. More specifically, the data enables
researchers to explore the education effects of different age and education
structures. The findings show that there are differences in the impact of
educational attainment on economic growth across age groups. In particular, tertiary
education of younger adults (20-39), for instance, matters more in terms of
economic growth than that of older adults, while the opposite is the case for
secondary education.
2. Make secondary education a goal In 2000 world leaders
meeting in New York announced the United Nations Millennium Development Goals
(MDGs). One goal that featured prominently was that of universal primary
education by 2015. These scenarios, however, highlight the benefits of
complementing universal primary education with broad based secondary education.
Only this step is likely to give initially poor countries the human capital
boost that is necessary to bring large segments of the population out of
poverty.
7. ROLE OF EDUCATION IN ECONOMIC
DEVELOPMENT:
Prior to
the nineteenth century, systematic investment in human capital was not
considered specially important in any country. Expenditures on schooling,
on-the-job training, and other similar forms of investment were quite small.
This began to change radically during this century with the application of
science to the development of new goods and more efficient methods of
production, first in Great Britain, and then gradually in other countries.
During the twentieth century, education, skills, and the acquisition of
knowledge have become crucial determinants of a person’s and a nation’s
productivity. One can even call the twentieth century the “Age of Human
Capital” in the sense that the primary determinant of a country’s standard of
living is how well it succeeds in developing and utilizing the skills and knowledge,
and furthering the health and educating the majority of its population. The
past decades have seen extraordinary expansions in access to basic education
throughout the Middle East. Many countries are now on the brink of a further
increase in access to secondary and higher education and in effecting
spectacular improvements in the quality of education offered at all levels.
Figure 2: Role of education in economic development
Education plays a notable role in economic development of an economy. It
helps in human capital formation, increasing productivity, reducing poverty,
women empowerment, social development, creating health awareness etc. through
which economic development can be stimulated .which is shown in figure 2.These
various roles of education in economic development with special reference to a developing country
India, are briefly discussed below
Ø HUMAN CAPITAL FORMATION:
Human capital is a collection of resources—all the knowledge,
talents, skills, abilities, experience, intelligence, training, judgment, and
wisdom possessed individually and collectively by individuals in a population.
Education is necessary for human capital formation. The problem of scarcity of
tangible capital in the labor surplus countries can be resolved by accelerating
the rate of human capital formation with both private and public investment in
education .human capital, on the other hand, is an instrument of promoting
comprehensive development of the nation because human capital is directly
related to human development, and when there is human development, the
qualitative and quantitative progress of the nation is inevitable. Recently
published IIASA research proves that human capital formation plays a
significant role in a country’s economic development.
In India, rate
of human capital formation has consistently increased after Independence due to
qualitative improvement in each generation. In the second decade of 21st
century, the third generation of India's population is active in the workforce
of India. This third generation is qualitatively most superior human resource
in India. It has developed the service sector of India with the export of financial services, software services, tourism services
and improved the Invisible balance of India's Balance of payments. The rapid growth of Indian
economy in response to improvement in the service sector is an evidence of
cumulative growth of Human Capital in India.
Recently govt. of India has taken some initiative to provide
more job oriented education to boost up supply of skilled labor and to enhance
the economy towards developed. Prime Minister Mr Narendra Modi launched the
Skill India initiative – ‘Kaushal Bharat, Kushal Bharat’. Under this
initiative, the government has set itself a target of training 400 million
citizens by 2022 that would enable them to find jobs. The initiatives launched
include various programs like: Pradhan Mantri Kaushal Vikas Yojana (PMKVY),
National Policy for Skill Development and Entrepreneurship 2015, Skill Loan
scheme, and the National Skill Development Mission.
Ø Education and Productivity:
Clearly the educational provisions within any given country
represent one of the main determinants of the composition and growth of that
country’s output and exports and constitute an important ingredient in a
system’s capacity to borrow foreign technology effectively. Health and
nutrition, primary and secondary education contributes to the raising of
productivity of workers both in the rural and urban part. Secondary education
contributes to facilitate the acquisition of skills and managerial capacity.
Tertiary education supports the development of basic science, appropriate
selection of technological imports and the domestic adaptation and development
of technologies. Both tertiary and secondary education more immensely
contributes to the critical elements in the development of key institutions of
the government, the law and the financial system among others.
The above discussion brings productivity to the economy
through education thereby enhancing the economic development of a country. In this
aspect India is no less in any manner. As a developing country, India has able
to achieve such a level through advancement in education that today India
remains as a top countries of the world, thereby increasing its economic
development day by day. In many fields such as in case of nuclear weapon, in
terms of marine equipment’s India remains in the 3rd place of the
world. This achievement is genuinely due to the contribution of education to
these sectors. If it continues to improve n same pace, the economic development
of our country would definitely improve to larger extent.
Agriculture and Industry even suggests evidences that through
education their productivity has improved a lot. Farmers are now able to use
modern technologies which give them more output than through the use of
traditional techniques. This point is even relevant to the industries as well.
With new equipments there is more industrialization. Educated labor and workers
are capable of using modern techniques and equipment in a proper way which
paves the way for more output leading to economic development.
India is one of the world's largest producers of white rice
and brown rice, accounting for 20% of all world rice production. The India's
rice production reached to a record high of 104.32 million tons in 2011-2012
crop years (July–June). Along with it wheat is grown on 13 per cent of the
cropped area of India. States like Punjab, Rajasthan, Gujarat, and West Bengal
are some of the areas specialized in this category. This landmark of India as a
developing economy is a great achievement. This brings a great economic
development.
Due to the presence of useful and educated workers, our
country’s industrialization has achieved a considerably good position. It is
now able to have a proper distribution of income, growth in international
trade, good quality and quantity of investment into the country. The industrial
policy of 1991 has a major impact on the economic development. Due to
advancement of educational sector, the policy makers are now using this policy
in an effective manner.
Ø Education reduces poverty:
Poverty is
a major threat to the existence of humanity in modern times, especially in
developing world. Investing in education is the most effective way of reducing
poverty .No country has succeeded if it has not educated its people, as history
repeats. Education and poverty are inversely related .The higher the level of
education of the population, lesser will be the number of poor persons because
education imparts knowledge and skills which is supportive in higher wages. The
direct effect of education on poverty reduction is through increasing the earnings/income
or wages. The indirect effect of education on poverty is important with respect
to ‘human poverty’ because as education improves the income, the fulfillment of
basic necessities becomes easier and raises the living standard which surely
means the fall in human poverty. The education indirectly helps in the
fulfillment of basic needs like water and sanitation, utilization of health
facilities, shelter, and it also affects the women’s behavior in fertility
decisions and family planning
Education
in every sense is one of the fundamental factors of achieving sustainable
economic development through investment in human capital. Education fosters
self-understanding, improve quality of lives and raises peoples productivity
and creativity thus promoting entrepreneurship and technological advance .in
addition it plays very crucial role in securing economic and social progress
thus improving income distribution which may consequently salvage the people
from poverty.
Education
provides a foundation for eradicating poverty and fostering economic
development .education is the key to increasing economic efficiency and social
consistency, by increasing the value and efficiency of the labor force and
consequently raises the poor from poverty.
Technical
and vocational education and training can create employment opportunities for marginalize groups and at the same time
integrate relevant learning skills .it can help youth find employment in green
jobs in alternative energy supply, recycling , agriculture, transport and
communication.
Ø Women empowerment:
“A nation which does not educate
its women cannot progress”
HaciBektaşVeli (1208-1270)
The subject of empowerment of women has becoming
a burning issue all over the world including India since last few decades. Inequalities
between men and women and discrimination against women have also been age-old
issues all over the world. Thus, women’s quest for equality with man is a
universal phenomenon.In India, the customs of purdha (veil system), female
infanticide, child marriage, sati system (self-immolation by the women with
their husbands), dowry system and the state of permanent widowhood were either
totally removed or checked to an appreciable extent after independence through
legislative measures.Two Acts have also been enacted to emancipate women in
India. These are: Protection of Women from Domestic Violence Act, 2005 and the
Compulsory Registration of Marriage Act, 2006. The Domestic Violence Act
recognizes that abuse be physical as well as mental.
There
was a time when women’s education was not a priority even among the elite.
Since the last quarter of the 20th century and more so after the opening up of
die economy, post-1991, a growing number of women have been entering into the
economic field, seeking paid work (remunerative jobs) outside the family.
Women
are playing bigger and bigger role in economic field: as workers, consumers,
entrepreneurs, managers and investors. According to a report of The Economist,
‘Women and the World Economy’, in 1950, only one-third of American women of
working age had a paid job.
We can
now see women in almost every field: architecture, lawyers, financial services,
engineering, medical and IT jobs. They have also entered service occupations
such as a nurse, a beautician, a sales worker, a waitress, etc.
The
rapid pace of economic development has increased the demand for educated female
labour force almost in all fields. Women are earning as much as their husbands
do, their employment nonetheless adds substantially to family and gives family
an economic advantage over the family with only one breadwinner.
In spite of such drawbacks and hurdles that still
prevail, Indian women (especially educated) are no longer hesitant or
apologetic about claiming a share and visibility within the family, at work, in
public places, and in the public discourse.
Ø Social development through education:
Education always has the great capacity to take forward the society
from the darker side to the light of hope .it act as an essential instrument,
for social and economic development .the hindrance to the societies
developmental activities in the form of superstitions, practice of evil
culture, dowry system, gender biasness etc. shakes the root of the society in
negative way. To eradicate such obstacles education paves its way.
More than half of the people of a developing country like
India live in the rural areas. Almost all the states in India are still
backward like Bihar, Assam, UP, Rajasthan, etc. India is still known to have
the largest slam areas in Mumbai which is evident even from space. These people
are backward from all aspects though the country is developing in a better way.
If education is provided to these areas then they would be literate,
contributing immensely to the development of the economy. Through educational
schemes, mass media etc. the knowledge, skills and perception of these people
can be improved. These provisions to the people lead to the development of
social and economic condition, therby raising the standard of living. No doubt
that these processes require a large gestation period .But, we are always aware
of the fact that one’s patience leads to a fruitful outcome. Thus, after a
larger period of the transformation of the society, not only the people would
develop themselves but contribute to development of a nation’s economy.
Ø Education and health awareness:
India is a densely populated country
where a large number of people live without access to the basic education and
primary health facilities. The situation is more complex in rural villages comparing
to the urban areas. Their houses are poorly established and do not have proper
supply of water and electricity. They somehow manage little water from
resources available at the distant places and hardly think of having shower,
clean their cloths and renovate their shelters. In addition to their poor socio
economic condition, another major cause of their sufferings is lack of education
and public awareness.
Health
awareness through education can be imparted into the minds of people. These
benefits the people in the following ways:-
1. To improve the knowledge and attitudes
of patients about detection, treatment and control of disease.
2. To promote the family and
community educational material essential for positive lifestyle habits.
3. To create public awareness about
the ill-effects of alcohol, smoking and drugs, etc.
The
above points focus to develop the people who can handle any critical situation.
Below are the points which lead to the effectiveness of education:-
1. To increase knowledge, attitude
and skills of all health professionals regarding sign, symptoms and management
strategies for health hazards to improve disease control.
2. To encourage health professionals
to treat patients carefully.
3. To develop resource and material
for use of health professionals.
4. To promote research all over the
world to curb health hazards.
5. To encourage continuing
educational programmes on accurate information on diagnosis and treatment of
diseases.
Education in the schools can also act as an
effective process for economic development of a nation. It is often said that
children are the future of a nation. So, educating their mind would lead to the
progress of the nation.
Many pharmaceutical companies in India are now
introducing various medicines for the betterment of the health of the citizens
to fight against diseases like swine flu, dengue, TB, cancer, Ebola, etc.
6.
Findings:
ü Education plays vital role in
economic development of a nation.it provides a foundation for development on
which much of our economic and social well-being is built.
ü It plays crucial role in human
capital formation, poverty reduction, women empowerment, social development,
health awareness etc.
ü Education is a
fundamental right and the basis for progress in every country. Parents need
information about health and nutrition if they are to give their children the
start in life they deserve. Prosperous countries depend on skilled and educated
workers. The challenges of conquering poverty, combatting climate change and
achieving truly sustainable development in the coming decades compel us to work together.
With partnership, leadership and wise investments in education, we can
transform individual lives, national economies and our world.
ü Only
broad based secondary education and universal primary education is likely to
give poor and developing countries the human capital boost necessary to bring
large segments of the population out of poverty. For more industrialized
countries, tertiary education of younger adults also plays a key role in
economic growth.
7. Suggestions:
India is on the
verge to be categorized as one of the developed countries in the world. But
still there is brain drain from our country. Is it so because of the education
system, i.e., the system is partially developed in some parts of our country
and is not in the remote areas. The system should be symmetrical all over for
the country to be developed. Without this there will continuation of brain
drain as the country would not develop as a whole. Development of some parts of
the country may contribute to development of the economy but partly. Complete
development would require the whole nation to be educated, leaving none. This
is because education broadens the minds of the people which will lead the
citizens to be open about any view or what is wrong or right.
No doubt that the study of foreign theory in any subject is
required for practical appliances. But some theories are made by the foreign
writers on the basis of the situation that is relevant in their country. Will
it help us if we study all such foreign topic or there is any requirement for
the study of the topics which are relevant to our economy?
Being a student from the state of Assam we much concentrate
regarding the topics related to our state. For example, we study the subject
history for our 10th standard. In this part we go through various
topics relating to the history of India and the World. But though we study
history of Assam, it is very much less. We have the right to know the history
of our state as much as our before generations are used to with the concept and
knowledge of the history.
Such small things should be considered which; we think will
contribute immensely to development of further education system in our country
hence leading to the economic development.
Thus,
macroeconomic policies of the nation should be focussed towards promotion of
human development and subsequently economic development.
- The policies set by the government with regards to the education system needs a huge restructuring.
- Motivation and flexibility is the need of the hour. Scholarships, vocational training, availability of more choice based combinations and options should be made available so that the youth can choose in accordance to his preference and liking where he can individually outperform.
- The reservation should be eliminated. A financial support to the willing should be extended rather.
- Government should make the education reasonable and fees should be cut down the private institutions.
- The government run schools should be improved and equipped with better resources and facilities.
- Admissions to government run organizations should be made easier and flexible so that very few people turn to private sector. There by enabling growth in revenues and equality amongst the various financial sections.
- Private sectors should be more focused on manufacturing and industrial growth there by investing the amounts in creating better job opportunities and business propositions. Housing and medical facilities should be improved working hands-on with the government. Infrastructure and basic amenities should be focused upon. A nation’s financial well-being depends upon the financial well-being of its individuals.
- Poverty, illiteracy, unemployment and inequality still need an immense attention. The youth has a crucial role to play in the coming years. It’s time to empower the women and youth, to educate the disadvantaged and work towards the growth of financially weaker sections by way of indigenous and superfluous resources they need to be brought to the mainstream and education and awareness is the only ray of hope.
8. Conclusion:
From the above discussion we can find
that education is indispensable to economic development. No economic
development is possible without good education. A balanced education system
promotes not only economic development, but productivity, and generates
individual income per capita. Education is important for the development of
human capital because a society of literate and skilled citizens has more
chance of development at the economic and social level. It can reduce poverty
and social injustice by providing the underprivileged resources and
opportunities for upward social mobility and inclusion.
Education alone, of course cannot transform an economy.
Though education plays a crucial role in the economic development but still our
country is underdeveloped. This is because education has failed miserably to
reduce poverty gaps, inequality, social injustice etc. Still today there are
many states in India where people are uneducated, lives in a unhealthy
environment. Indian education system has suffering from drawbacks such as
outdated theory with no innovation or any practical work, law quality teaching,
lack of equipments in school etc. The government has to take certain steps for
the reduction of such drawbacks. Important should be given for quality
education. So that education can boost the pace of economic development in the
country.
9. REFERENCES:
q Cooray,
A. V. (2009). The role of education in economic growth. Proceedings of the 2009
Australian Conference of Economists (pp. 1-27). Adelaide, Australia: South
Australian Branch of the Economic Society of Australia.
q http://mpra.ub.uni-muenchen.de/9023/
MPRA Paper No. 9023, posted 8. June 2008 11:31 UTC
q The Human
Capital Report 2015
q Agrawal,Meenu,Education
in third world and India,kanishka publishers,new delhi
